Rs 15-cr scam in KSHDC, criminal case filed

Rs 15-cr scam in KSHDC, criminal case filed

The general manager (finance) at the Karnataka State Handicrafts Development Corporation Limited (KSHDC) and other officials have been booked for embezzling more than Rs 15 crore from the corporation at United Mansion on MG Road. 

The suspect, G C Kishore Kumar, has been suspended indefinitely pending inquiry and investigations. 

Although a statutory audit said all the corporation’s funds were in place, senior KSHDC officials recommended a police investigation. Based on their apprehensions, General Manager (Administration) Narayana K Naik (53) filed a complaint with the Ashok Nagar police. 

The investigating officer confirmed the scam but is not certain about Kumar’s involvement since the probe is in its early stages. 

The fraud happened between December 17, 2016, and October 17, 2018, when bank officials colluded to open a fake account in the name of “Managing Director, KSHDC Limited” to divert funds. 

While nationalised banks hold a thorough scrutiny before opening accounts for government agencies and public sector undertakings, officials in this instance opened an account with just cash deposits without any official intimation or letter correspondence, raising suspicions.

Stumbling on suspicious transactions, senior KSHDC officials wrote to the government for a state audit instead of a statutory audit. The special auditor appointed to scrutinise the accounts had credible apprehensions that large sums were swindled. They registered an FIR to ensure that the public money is recovered soon. 

The scam’s full magnitude and the method of embezzlement will be known only after the state auditor gives his report and the investigation gets over. Sources hinted that the KSHDC’s finance wing officials, with access to funds and decision making powers, could have colluded with the bank officials to commit the fraud. 

“We wrote to the government recommending suspension of the said officer to facilitate a fair and impartial inquiry and investigation. To know the magnitude and the methodology of the scam, we have requested the government to do a state audit and the report is awaited,” said Rajiv Pratap Sharma, ADGP, Managing Director, KSHDC. 

The Ashok Nagar police have booked Kumar under criminal breach of trust, cheating and forgery and have sought further details on the suspicious transactions.